Taxes
There is a significant expression that only two things in life are certain, death and taxes, especially income tax, a typical kind that levies in a progressive way on the amount of money people received for their working. While it is argued that progressive taxes may breed disincentive to people who intend to work overtime due to the increase in the amount of tax payment, the others only assume it to be a duty of each individual to contribute to the sustainable growth and development of society. Although both opinions are argumentative, from our standpoint, disagreement has a substantial impact on employees.
On the one hand, there are reasons to explain why under progressive tax policy, people tend not to work overtime. The most obvious reason for this view is that employees may believe the amount of money earned from working extra hours not as worthy as the time, health and effort they spend. The salary which employees earn from working overtime will make a partial contribution to taxable income; furthermore, according to progressive taxes, a higher income will raise the taxable income to a higher tax bracket. It means that employees have to pay more tax to the authority. For example, a lot of low– and middle-income workers refuse to increase their time in work because the tax imposed on them will be of a more significant proportion and they will feel unfair. That is why many employees choose to rest instead of earning extra income from overtime work.
On the other hand, the view that progressive taxes policy discourages employees from working overtime is not entirely accurate. Firstly, progressive tax policy is a practice to help the government divide the responsibility to the poor and the rich depending on individual income. Subject to higher tax rates, the wealthier class is judged differently through social status and working capacity. For example, when someone has a monthly income of upper 80 million, which is a desirable salary, it becomes a norm even if he or she has to pay 35% of personal income taxes. Secondly, taxes are a crucial part of the citizens’ obligation to contribute to the public benefits, in other words, a particularly important source of income which helps the government to maintain and improve the infrastructure. Thirdly, tax payment is just an inappreciable part of the whole income. The fact that, at the highest tax rate, 35%, the figure 80 does not represent for total income, just is assessable income which exempts numerous income such as overtime salary, scholarship allowance and minus a lot of deduction from total income, for example personal relief, dependent relief.
In conclusion, our group agrees that a majority of employees can not be discouraged from working overtime by the progressive tax. In comparison with net pay, even at the highest tax rate, it is obvious that tax contribution just accounts for a relatively small part in total income. We believe that progressive tax will have never been a barrier for employees who have been trying their best to maximise personal income.